October 31, 2003
CHICAGO EQUITY FUND
Ms. Jennifer J. Johnson, Secretary
Board of Governors of the Federal Reserve System
Twentieth Street and Constitution Avenue, NW
Washington, DC 20551
Attention: Docket No. R-1154
Office of the Comptroller of the Currency
250 E Street, SW
Public Information Room Mail Stop 1-5
Washington D.C. 20219
Attention: Docket No. 03-14
Regulations Comments
Chief Counsel's Office
Office of Thrift Supervision
1700 G Street, NW
Washington, DC 20552
Attention: No. 2003-27
Robert E. Feldman, Executive Secretary
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
Attention: Comments
Dear Sirs:
The Chicago Equity Fund is a tax credit syndication firm. We
appreciate the opportunity to comment on the proposed Risk-Based Capital
Rules.
Chicago Equity Fund strongly supports the provision of the proposed
special rule for "Legislated Program Equity Exposures". This special
rule preserves the current capital charge on most equity investments
made under legislated programs that involve government oversight,
including public welfare investments made by banks in compliance with
Community Reinvestment Act (CRA) regulations. These programs provide a
vital source of private sector financing for affordable housing and
community development for low- and moderate-income communities,
particularly in our area of the country.
However, we are troubled by another proposed rule change. The
proposed "materiality" test would affect banks that have, on average,
more than 10% of (Tier 1 plus Tier 2) capital in ALL equity
investments. Our concern is that the proposed rule change could
unintentionally discourage banks with substantial CRA investments from
maintaining the same level of CRA investments, so as not to trigger
higher capital charges on non-CRA investments. Please consider excluding
CRA-related investments from the materiality test calculation. This will
help ensure the continued availability of private equity capital for
meeting the affordable housing needs of our nation's poorest families
and for building sustainable communities.
William W. Higginson
President & CEO
Chicago Equity Fund
One East Superior Street
Chicago, IL
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